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EDMONTON, Nov. 28 /CNW/ - Rentcash Inc. ("Rentcash") today announced that
it has received shareholder approval for its previously announced spin-off of
Rentcash's rental division into a separate public company. Approval was
received at the Company's 2007 Annual and Special Meeting held today in
Edmonton, at the Fairmont Hotel Macdonald, at 10:00 a.m. (MST).
Mr. Gordon Reykdal, Chairman and Chief Executive Officer commented, "We
anticipate the spin-off to occur in the third quarter of fiscal 2008, after a
ruling has been received from the Canada Revenue Agency. We are pursuing a tax
ruling to allow shareholders who are residents of Canada to receive Insta-rent
Inc. shares tax free. For every share of Rentcash, shareholders will receive
one share of Insta-rent Inc. on a one-for-one basis. The value of Insta-rent
shares will be determined through a valuation process currently being
performed by Deloitte &amp; Touche. We believe that the divestiture will provide
better clarity for both business models and have a positive long-term impact
on shareholder value."
Mr. Bill Johnson, President and Chief Operating Officer of Insta-rent
further commented, "This past year was dedicated to preparing the rental
division to function efficiently as a stand-alone company. Store count was
reduced, expenses were cut, store operating margins improved and losses
reduced. Although still operating in a minor loss position, the rental
division is now well-positioned to operate as a separate company."
It was also announced that subsequent to the spin-off that the parent
company, Rentcash, will undergo a name change to The Cash Store Financial
Services Inc. The name change will signal to the market that the rental
division transaction has been completed. The spin-off is subject to approval
of regulatory authorities, including the Toronto Stock Exchange and the TSX
Venture Exchange.
About Rentcash
Rentcash is the only payday advance broker in Canada publicly traded on
the Toronto Stock Exchange (TSX:RCS). Rentcash operates 421 stores across
Canada under three banners: The Cash Store, Instaloans and Insta-rent.
The Cash Store and Instaloans act as brokers to facilitate payday advance
services to income-earning consumers and provide two private-label debit
cards, The Cash Store Cash Card(TM) and InstaWorld Debit Card, and a prepaid
credit card, the Freedom Mastercard, to those who may not be able to obtain
them from traditional banks.
Insta-rent rents brand-name furniture, appliances, electronics and
computers, with or without an option to purchase. Insta-rent operates
primarily in The Brick and United Furniture Warehouse locations, which are
part of The Brick Group, one of Canada's largest volume retailers of household
furniture, mattresses, appliances and home electronics.
Rentcash employs more than 1,800 associates and is headquartered in
Edmonton, Alberta. In 2007, Rentcash was named "Canada's Fastest-Growing
Company" by PROFIT Magazine and ranked number three in the top 25 performers
with revenue greater than $20 million, in Alberta Venture's "The Fast 50."
Cautionary Statement Regarding Forward-looking Information
This press release contains "forward-looking information" within the
meaning of applicable Canadian securities legislation. Forward-looking
information includes, but is not limited to, information with respect to our
objectives, strategies, operations and financial results, as well as the
company's plan to spin-off the rental division. Generally, this
forward-looking information can be identified by the use of forward-looking
terminology such as "plans", "expects", or "does not expect", "is expected",
"budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or
"does not anticipate", or "believes" or variations of such words and phrases
or state that certain actions, events or results "may", "could", "would",
"might", or "will be taken", "occur", or "be achieved". Forward-looking
information is subject to known and unknown risks, uncertainties and other
factors that may cause the actual results, level of activity, performance or
achievements of the company, to be materially different from those expressed
or implied by such forward-looking information, including, but not limited to,
changes in economic and political conditions, legislative or regulatory
developments, technological developments, third-party arrangements,
competition, litigation, risks associated with the spin-off of the rental
division and a favorable CRA ruling including, but not limited to, market
conditions, the availability of alternative transactions, shareholder, legal,
regulatory and court approvals and third party consents and other factors
described in the company's Annual Information Form dated September 26, 2007
under the heading "Risk Factors". Although the company has attempted to
identify important factors that could cause actual results to differ
materially from those contained in forward-looking information, there may be
other factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such information will prove to be
accurate, as actual results and future events could differ materially from
those anticipated in such information. Accordingly, readers should not place
undue reliance on forward-looking information. The company does not undertake
to update any forward-looking information, except in accordance with
applicable securities laws.
All published financial statements can be obtained from SEDAR at
www.sedar.com and the company's web site at www.rentcash.ca.